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Hedge fund manager John Paulson held a $1,000-a-head fundraiser for the Senate Banking Committee chairman last year.
Reuters

FEC records show that Dodd, the driving force behind the bill, collected big money from hedge fund managers — particularly in 2009, as he prepared for the reelection campaign he eventually abandoned. In recent years, Dodd has received $18,000 in campaign contributions from the Top 10 hedge fund managers on the Absolute Return + Alpha list.

Asked about Paulson’s contributions to Dodd, a spokesman for Paulson said in a statement: “John Paulson supports a variety of candidates in both political parties, based on keeping the United States the financial and economic capital of the world.”

Hedge fund managers prefer the Senate Banking Committee’s bill to the measure that passed the House last December. Unlike the House bill, the Banking Committee bill does not put restrictions on executive compensation for hedge funds.

Under the House bill, hedge funds could shoulder the bulk of the financing to wind down failing financial institutions, since hedge funds with more than $10 billion in assets would have to pay into the program. Dodd’s bill would spare hedge fund managers by making more systematically risky firms finance the program for failing institutions – unless the hedge funds themselves are considered systemically risky.

The Banking Committee’s bill would require hedge funds with more than $100 million in assets to register with the SEC and smaller ones to register with states, but some advocates of tougher regulations are concerned that it would not go as far as the House bill in pushing them to divulge information about their risks to investors and creditors. Supporters of the Banking Committee’s bill say the measure gives the SEC ample authority to investigate the books of hedge fund managers.

Private equity firms and venture capitalists are both exempt from certain registration requirements under Dodd’s bill. Sen. Jack Reed (D-R.I.) is preparing an amendment that would close off that exemption by requiring private funds with more than $30 million in assets to register with the SEC and disclose information to regulators on any risks.

Douglas Lowenstein, president of the Private Equity Council, which represents private equity firms, said the House, the Senate Banking Committee and the Obama administration “all have recognized that private equity firms, by their nature of their business model, do not pose systemic risk.” And he said that the group supports the need for regulators to obtain information about private equity firms’ systemic risk, which both the House and Senate bills would allow them to do.

The Managed Funds Association, which represents hedge funds, supports mandatory registration requirements for its members and all private investment firms.

The disparity between the two bills comes on the heels of another House-Senate fight — over whether to continue allowing hedge funds, private equity firms and other similar partnerships to treat profits at the capital gains rate of 15 percent — rather than as ordinary income, with tax rates as high as 35 percent. The House is pushing forward with language that would increase the tax rate as a way to pay for a number of expiring programs, but the Senate has long resisted such a tactic.

Sen. Chuck Schumer (D-N.Y.) said Monday that the tax is “one of the things on the table” as the two bodies negotiate. But Schumer has many allies on Wall Street, too. When he ran the DSCC in the past two cycles, Schumer was notorious for collecting funds from top money managers, including nearly $150,000 from the 10 wealthiest hedge fund managers, FEC records show.

Readers' Comments (37)

Hedge Funds got a 'boost' when Clinton's Kid needed repeal of The Glass/ Stegal Act and GOP's Gramm got the 'sex-scandal' to force a signature on that Republican Congress Bill ... but ... "We The People" Sold Our Government wayyyyyyy before that ...

When we let President Ronald R. "Bust" that Air Controllers Union, it was obvious that what Gerald Ford Started, was well on its way to Bush Wars and Tax Cuts for Cronies .... The Dems were complicit in signing (Clinton) now Obama wants to join the GOP chant of 'drill, baby drill' and my Only Advise To The Next Generation Of "We The People" is:

1) Learn to speak Chinese

2) Learn To Farm and Fish and Hunt (True survival is not the NRA's way)

[Sidebar: Sure would like to see a new coalition of the best from both Tea-Party and Coffee-Party]

YOU meanthe Hedge Fund Managers That Hillary and Barrack openly Blamed for the econmy down fall.. You mean The Hudge Fund Mangers who was in bed with George Bush.. You meantbhe Hudge fund managers was increase the cost of Oil and Gas.. Buy funding the buying of it on speculation...

I am so Glad that These hedge Fund Managers have little or NO input now that Bush / Cheney are out of office...

What they are still donating.. and they are giving money to the democrats...That Pesky Bush now he is a Democrat .. How else can you explain that The Hudge Fund managers That Hillary and Barrack openly blamed during the debate in New Hamshier ...

Nah they have to be funneling the money to bush via democratic national campiagn funds.. That it Yah F in Sheep goes Bah too!

George Soros's , the hungarian born billionaire is the story behind Obama and the Democrats. Media Matters is his baby and gee whiz the guy likes Chavez so why not take his money Obama? Friendly with Dictators, no problem.... the only problem is we like our freedom here in the USA and George Soros doesn't want us to have it.

It is established that the johns pay for play. The only variation seems to be the party they dance with at the moment and how much the drawn out forplay might cost. Our problem seems to be that at the end of the bill signing we po folk know we've been had too but have nothing to show.

Just the $20m that a few retiring (having seen the cliff) dems can share with their buddies would be enough to provide some of that healthcare they sputter about to the uninsured (read illegals) in the Sanctuary cities. Imagine what all that lobby money could do if it went where people need it rather than expect it.

One million is chump change for the biggest hedge fund manager, George Soros. He spent at least 20 mil on John Kerry, and another 20 mil plus on President Hussien Obama. Didn't see much mention of that in the article, tho. Courious that...or perhaps not.

These hedge fund managers are cheapskates. They have so much money, they could afford to buy dozens of Congressmen outright. Instead they spend a few thousand and get a lousy time share that must be shared with the unions, banks, oil companies, lobbyists etc. Geesh.

Quick! Fill up another office building in Washington with $70,000-per-year federal employees. We need them to do what the SEC, the Fed, the FDIC, the CFTC -- you know, the federal regulatory agencies -- didn't do last time.

This building full of government employees will be different. Unlike the other agencies, which are incompetent and were obviously asleep at the switch, this new regulatory agency will have different letters and different letterhead stationery and everything. They'll even be another leather chair for another Marxist professor that Obama can appoint!

It will be so much better once we have another building full of desks, phones, and government bureaucrats. Then we will be safe.

Too bad that so many election winners win on corrupt money. Maybe that's why the barrier between rich and poor is so wide, getting closer to that exemplified by India and Mexico, and not unlike China during its last dynasty!.

Hedge fund managers donate $1mm. This demonstrates what a bunch of whores we have serving in Congress. $1mm? These guys spend more than that on catering for their offices. Our government is for sale for $1mm?

Over the years, pundits have suggested that Congress be given a bonus for balancing the budget. I would suggest giving each of the 535 members $1mm as a bonus for each year the budget is balanced. It's chump change in the big picture. It would be enough to motivate enough members to make a balanced budget a reality. Plus, it would give sociologists something to study: the battle between the greed for money and the lust for power. Like the punchline from the old jokes: "we've already established what you are, we're now just arguing over the price."

Steven Cohen of SAC Capital Advisors, who earned $1.4 billion last year, contributed $59,000 to the Democratic Senatorial Campaign Committee’s coffers in 2006 and 2007 and $58,900 to the National Republican Senatorial Committee in 2007 and 2009, records show.

My Dad always said that if you're looking to hang an American, just ask - he'll sell you the rope!

When you hear of government corruption, you tend to think of 3d world countries NOT America.

I urge every American to vote ALL incumbents out of office, WE need to take our country back while WE still can and get the elected to start debating bills on their merit not on who gave the most to a campaign and start holding them accountable for their actions at each election.

Notice how the HEDGE FUND Managers have poured thousands of dollars into the national DEMOCRATIC PARTY. Big Wall Street and the DEMOCRATIC PARTY are cut from the same cloth. These Wall Street Firms do not believe in free markets--they have co-opted the Federal Reserve which has encouraged risky behavior without consequences. You have the freedom to succeed but also the freedom to fail.

1. Pres. Obama helped his party pull in record Wall Street contributions — $89 million from the securities and investment business;

2. Wall Street helped elect Barack Obama with an unprecedented support for a Democratic presidential candidate (Goldman Sachs was the second largest contributor to the president’s campaign);

3. For his presidential campaign in which Wall Street regulation was a mantra, Obama's top source of funds was investment bank giant Goldman Sachs, whose employees, partners, and executives gave him $995,000 -- that's the most any politician has raised from any one company in a single election since the age of "soft money" ended;

4. In addition, Wall Street has long been a major source of Democratic campaign money (alongside Hollywood and Silicon Valley), Pres. Obama built unusually direct ties to his contributors there. He is the first president since Richard M. Nixon whose campaign relied solely on private donations, not public financing;

5. Wall Street lobbyists backed by the financial industry’s big Democratic donors help ensure that their arguments reach the ears of the president and Congress. White House visitors’ logs show dozens of meetings with big Wall Street fund-raisers, including Gary D. Cohn, a president of Goldman Sachs; Mr. Dimon of JPMorgan Chase; and Robert Wolf, the chief of the American division of the Swiss bank UBS, who has also played golf, had lunch and watched July 4 fireworks with the president; and

6. Lobbyists say they routinely brief top executives on policy talking points before they meet with the president or others in the administration.

Wall Street Allies in Congress and the Presidency--The DEMOCRATIC PARTY.

George Soros and the other Wall Street fat cats are second only to the unions in terms of being in the pockets of the democrats. Amazing that no one talks about where was Chris Dodd when all the AIG, Lehman, Goldman, Fannie Freddie mess was at its peak during 2007 and 2008? He had moved to Iowa.

As Chairman of the Banking Committee. No oversight hearings. Rather just a lot of fundraisers being hosted by the Wall Street fat cats who knew he would never win but needed his help when he returned to the senate. Chris Dodd should have recused himself from doing regulatory reform. He is so punch drunk on Wall Street cash it is hard for him to steer clear of any conflicts.